Ever wonder why the economy keeps defying those gloomy forecasts? There's an 800-pound gorilla in the room that doesn't get nearly enough attention: Baby Boomers and their absolutely staggering wealth.
The numbers tell a story most economists acknowledge but few fully appreciate. Between 70-73% of America's wealth sits in the accounts of those 55 and older. More than half of that? It's with the 65+ crowd. That's not just a statistic—it's the secret sauce keeping parts of our economy surprisingly buoyant.
I've been tracking consumer spending patterns since the pandemic began, and something always felt off about the dire predictions versus what was actually happening. Restaurants in upscale areas? Packed. Premium cruise lines? Waitlisted. High-end retailers? Posting decent numbers despite inflation.
It's the wealth effect in action, but with a generational twist.
Think about it. If you're 70 years old with $2 million in assets (and many Boomers have considerably more), what's another 2% inflation to you? Your mortgage is history. Your portfolio's been riding the longest bull market ever. And that Social Security check? It arrives like clockwork, with cost-of-living adjustments to boot.
These folks aren't losing sleep over a $7 latte or $1,500 airfare to Europe. They're spending because... well, why the hell wouldn't they?
The psychology here matters tremendously. When you've spent decades building wealth and you're staring at a finite runway ahead, economic anxiety hits differently. It's not that Boomers don't care about money—they're often famously frugal—but their threshold for what constitutes financial pain is simply higher than for younger generations.
Which explains that persistent disconnect we've all noticed. Americans tell pollsters they feel terrible about the economy, yet consumer spending keeps humming along. Both things can be true simultaneously when wealth distribution looks like a barbell, with one very heavy end.
"The difference in spending confidence between my clients in their 30s versus their 60s is night and day," a financial advisor told me recently (requesting anonymity because her firm doesn't authorize media interviews). "My younger clients scrutinize every expense. My older ones are focused on experiences and legacy."
This has profound implications for where to look for economic resilience. Companies serving older, wealthier Americans—think premium healthcare, wealth management, luxury travel, and higher-end retail—have a demographic cushion that could last for years.
Look, I'm not suggesting we ignore the very real challenges facing younger Americans. The housing affordability crisis is brutal. Student debt remains crushing. Childcare costs are prohibitive.
But from a pure market perspective? This concentration of wealth among older Americans creates a remarkably durable spending base that doesn't flinch at the usual economic hiccups.
It's part of why I've remained skeptical about those calls for a deep recession. The data keeps confounding the doomsayers. Certain sectors demonstrate surprising resilience even amid broader concerns. And the reason might just be sitting across from you at Thanksgiving dinner, casually mentioning their upcoming Mediterranean cruise.
The great wealth transfer is only beginning. Trillions will change hands over the coming decades as Boomers pass their assets to younger generations. Until then, their spending patterns will continue shaping the economy in ways that conventional models sometimes miss.
The vibes are bad, but the data is... complicated. And somewhere in that gap, you'll find millions of Boomers quietly spending their accumulated wealth, one premium experience at a time.
